Annual Report 2011 - SuperFacts.com

Lutheran Super Annual Report 2011Back to contents6Super newsThe Federal Government announced a numberof changesIt seems that superannuation is always changing andthe last twelve months have been no different with theFederal Government announcing a number of changesaffecting superannuation. Whilst a number of thesechanges have already been legislated, some are yet tobe passed by Parliament. Changes which have beenannounced over the last year or which are still to beimplemented include the following:Changes to the Superannuation GuaranteeIn March 2012, the Government passed the MineralsResource Rent Tax (known as the Mining tax),bringing with it a range of improvements toAustralians' super including:• a gradual increase in the Superannuation Guarantee(SG) from 9% in 2013 and reaching 12% in 2019-20.This will assist in improving the adequacy ofretirement benefits provided to Australians and thesustainability of Australia's retirement income system.• the abolition of age limits for super contributions.Currently, once you reach age 70, SG contributionsare no longer allowed to be paid on your behalf.From 1 July 2013, there will be no longer be anage limit. This is also a positive change whichbroadens the range of employees covered bythe Superannuation Guarantee.SG contributions to rise from 2013Superannuation contribution for lowincome employeesA new contribution of up to $500 (not indexed)will be provided by the Government for individualswith an adjusted taxable income* of up to $37,000and who satisfy certain other conditions. This isdesigned to effectively return the 15% contributiontax on Superannuation Guarantee contributionsand will commence in respect of contributionsfrom 1 July 2012 with the first payments beingmade in the year commencing 1 July 2013.This change will help to improve the taxeffectiveness of superannuation for eligible lowincome earners, as well as provide a boost to theirsuperannuation savings. This change is set toproceed with the passing of the Mining tax.* Your adjusted taxable income includes your taxableincome plus a number of other items. Go to the AustralianTaxation Office website for more details – www.ato.gov.auHigher concessional contribution limit for somemembers aged 50 or more to reduceThe current transitional concessional limit of $50,000applicable to those aged 50 or more only applies until30 June 2012. The Government has announced thatthis limit will reduce down to $25,000* for all membersregardless of age from 1 July 2012.* The limit is normally indexed based on movements in full timeadult Average Weekly Ordinary Time Earnings (AWOTE) androunded down to the nearest multiple of $5,000. However,the Government has paused indexation of the concessionalcontribution limit to ensure it remains at $25,000 until 30 June 2014.Refund of excess concessional contributionsThe Government has announced that, from 1 July 2011,individuals who breach the concessional contributionscap by $10,000 or less can request the excesscontributions be withdrawn from their super fundand refunded to them. Those excess concessionalcontributions will be taxed at the individual’s marginaltax rate.This measure, if passed by Parliament, will only applyfor first time breaches of the concessional cap and onlyapply to contributions made from 1 July 2011 onwards.Flood levyFrom 1 July 2011, many superannuation benefits willbe treated as income for the purposes of determiningwhether a person is subject to the flood levy for the2011-12 year. The flood levy will apply to taxableincome as follows:Taxable incomeFlood levy on this income$0 to $50,000 Nil$50,001 to $100,000 Half a cent for each$1 over $50,000Over $100,000$250 plus 1c for each$1 over $100,000Taxable income will include the following in relation tosuperannuation:• the taxable component of all superannuation lumpsum and pension benefits received before age 60• the taxable component of a lump sum death benefitpaid to certain dependants• the taxable component of a pension death benefitwhere the recipient is under age 60 and thedeceased member died before age 60.It will not apply to superannuation benefits that arerolled over or to income which is exempt from tax.Co-contributions reduced but still valuableThe Federal Government currently makes a specialcontribution for you up to $1 for each $1 contributionyou make from your after-tax income (subject toyou satisfying the qualification requirements). Themaximum co-contribution is $1,000 a year if your totalincome is less than $31,920 a year. The co-contributionreduces gradually for those earning up to a maximumof $61,920.